Manufacturing takes downturn in February 2019

MANILA, Philippines — Decreased output by food manufacturers stunted the growth of the factory sector both in terms of volume and value in February, the Philippine Statistics Authority (PSA) reported yesterday.

Factory output, as measured by the Volume of Production Index (VoPI), contracted by 8.5 percent last February, reversing from a growth of 15.2 percent in February 2018.

PSA attributed this to the decline in eight major sectors led by food manufacturing, which dropped by 19.5 percent and mineral products, which fell 12 percent.

The Value of Production Index (VaPI) also went down by 5.5 percent in February compared with a 15.5 percent growth in the same month last year.

This was also attributed to declines in the indices of four major sectors led by food manufacturing.

Net sales volume, however, continued to register growth although at a slower pace of 2.2 percent in February 2019 compared with 6.6 percent in February 2018. Sales were helped by the following sectors: wood and wood products, tobacco products, printing, basic metals, footwear and wearing apparel, chemical products, and beverages.

Growth in net sales value was likewise slower during the period at 5.5 percent in February compared with 6.8 percent in the same month last year. This was propped up by wood and wood products, furniture and fixtures, tobacco products, printing, beverages, and transport equipment.

The Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) survey registered a reading of 51.9 in February 2019, the weakest reading since August 2018.

The headline PMI provides a quick overview of the health of the manufacturing sector based on output, new orders, job creation, inventories, and delivery times.

This, however, was still within expansionary territory as a reading of below 50 indicates contraction.

Purchasing managers who responded to the survey for the index reported diminished domestic demand as indicated by the slower growth for new orders.

They also reported that selling prices also rose at a slower pace amid relatively soft cost inflation.

PSA data also showed that factory gate prices eased in February as seen in the slower growth of 3.6 percents in 1the Producer Price Index for manufacturing during the month from 3.8 percent in January.